FCA publishes consultation paper on introducing a gateway for firms who approve financial promotions

By Liam Edwards

The FCA has published a consultation paper (CP22/27) on the introduction of an applications gateway for the approval of financial promotions by authorised firms. This follows the Treasury confirming its intention to implement a new regulatory gateway for all authorised firms under FSMA 2000 in its June 2021 consultation response on a Regulatory Framework for Approval of Financial Promotions.

The consultation puts forward a number of proposals for authorised firms who either approve, or intend to approve, financial promotions for unauthorised firms. The FCA does not expect the consultation to generally be relevant to the approval by authorised firms of the financial promotions of their appointed representatives or unauthorised firms within their corporate group.

The consultation focuses on the following aspects of the proposed gateway:

• how the FCA will assess applicants at the gateway;
• the basis for the FCA granting or refusing applications;
• a bi-annual reporting requirement for firms that are given permission to approve financial promotions;
• a requirement that firms that are granted permission to approve financial promotions must notify the FCA when they approve, or amend or withdraw approval of, a financial promotion, within 7 days of doing so;
• not extending the compulsory jurisdiction of the Financial Ombudsman Service to the approval of financial promotions; and
• further consequential changes made to the FCA’s non-Handbook guidance for firms that approve financial promotions for investments and additional text on the Consumer Duty.

The deadline for responses is 7 February 2023.

For further UK financial services regulatory updates, please visit the Burges Salmon blog.